Breaking News: 10-Year Treasury Yield Highest in 4 Years!

10-year Treasury note up 4.8 basis point to 2.943%. Continue to Short USD/JPY?

Fed’s meeting on Wednesday mentioned that they see no risk of the economy overheating. Senior Fed officials appeared to have marked up their forecasts for economic growth in the near term relative to those made for the December meeting in light of the strength of recent data on economic activity in the U.S. and abroad."

• The Dow Jones industrial average closed 167 points lower after a more than 303.24 point rally in mainly blue chips.

• The comments from FOMC on Wednesday suggested the course of three quarter-point hikes in the federal-funds rate, from the current range of 1.25%-1.50% remains intact.

• Treasury yields, and the US dollar whipsawed following the news. The benchmark 10-year note yield initially fell from session highs after the release but recovered to reach a fresh four-year high above 2.95 percent.

• The Dollar soared in response, driving EUR/USD to 1.22 and USD/CAD to 1.27 price levels.

• USD/JPY dropped after the data as funds flow to safe-haven continued.

US yields and dollar strength is in an unusual situation as of now. How can it be that US yields are rising sharply, yet the dollar is so weak at the same time? Higher yields point to lower bond prices because investors don't want to buy them. This is an entirely different regime as compared to previous years.”

Fullerton Markets Research Team

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